Since its 4.4.10 release way back in 2008, Damn Small Linux languished as an inactive project. But a month ago John Andrews announced 4.11 release candidate 2. It includes updated apps and bug fixes. Download from here (only 50m). More on what's in the release candidate here. DSL is popular for making older computers useful and also works well as a tiny live distro.

Well... everything you could do back when the old hardware was new? Which is basically everything except use more recent functionality and newer versions of major programs that absolutely require lots of CPU and/or GPU power and memory or special artificially-imposed DRM restrictions (think Blu-Ray, for an example of something that requires all three...).

Low-res video and audio playback, older games, server, firewall, various other special-use setups... it might be limited, and I personally wouldn't want to do it, but it's possible. Lightweight distros (though IMO not exactly DSL... too bare, basic and outdated) are also excellent even on modern systems for getting the most out of your resources.

Really though... such old hardware is a ticking timebomb, just waiting to break, so I would really limit my own hardware to about a decade. I was using my computer from 2001 (on 24/7) for about that long before I decided to give it some rest. Some time later, I wanted to experiment with something so I hooked it back up, plugged it in and crap just started breaking down, so I just gave up.

The machine ran rock-solid for more than a decade rock-solid (though growing increasingly painful for everyday use as a desktop, as my use became more resource-demanding and desktops became heavier), but it seemed to be the extended time turned off and subsequent re-powering that finally done it in.

Some time later, I wanted to experiment with something so I hooked it back up, plugged it in and crap just started breaking down, so I just gave up.
The machine ran rock-solid for more than a decade rock-solid (though growing increasingly painful for everyday use as a desktop, as my use became more resource-demanding and desktops became heavier), but it seemed to be the extended time turned off and subsequent re-powering that finally done it in.

The issue I've run into with keeping my old ~1999 "classic gaming/BeOS" machine alive is hard drive failure. Over the years every PATA drive in my house has developed issues, though the one in the machine right now is in the best shape with just a few bad clusters. It's gotten to the point that I'm about ready to throw it all out and stick to VMs on my newer machines, rather than splurge on a SATA => PATA adapter and throw in a newer drive.

Oh, but it's so nice having native BeOS and classic games on a system with a "real" 3D video card...